G20 nations reject bid to co-ordinate monetary policies

The tension between developed and emerging countries over the advanced economies' wind-back of their stimulus programs looks set to continue, with G20 nations stopping short of agreeing to developing markets' demand for the co-ordination of monetary policies.

Finance ministers and central bankers from some of the world's biggest economies said their monetary policy settings would ''continue to be carefully calibrated and clearly communicated'' and they would be ''mindful of impacts on the global economy''. ''Our primary response is to further strengthen and refine our domestic macroeconomic structural and financial policy frameworks,'' the G20 communique, issued at the end of the two-day weekend meeting in Sydney, said.

Emerging economies have blamed the US and other developed countries' reduction of their stimulus programs this year for sparking economic and market volatility. Ahead of the G20 meeting, emerging markets called on developed nations to co-ordinate the tightening of their monetary policies so as to reduce the impact on other countries.

The tightening of the policies, which were put in place by developed nations to support their economies after the financial crisis, forced some emerging markets such as Turkey to sharply raise interest rates earlier this year.

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The managing director of the International Monetary Fund, Christine Lagarde, said the commitments to ''global dialogue and improved communication are essential to help safeguard financial stability''.

''[The G20] also committed to take the necessary steps to manage deflationary and inflationary pressures. The IMF supports these efforts, and stands ready to assist its members with policy advice, and where needed, with financing,'' she said on Sunday afternoon.

Mexico's Deputy Finance Minister Fernando Aportela Rodriguez told Fairfax Media all the central bank governors had a ''clear message that the forward guidance will be conducted with clarity and certainty, and that there wouldn't be any such changes in the policy''. ''And they will try to have communications with the markets that would try to limit volatility.''

The G20 also pledged to lift global growth by 2 percentage points above current projections over the next five years through increased investment, greater employment and participation, stronger trade and competition.